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Telecity, which runs some of the huge computer centers which
process traffic on the Internet, said in a statement its board
had recommended Equinix's offer, and as such it was terminating
an all-stock deal to buy Interxion for $2.2 billion.
The acquisition of Telecity by Equinix, a deal which Reuters
reported was near to finalization on Thursday, would create the
largest data center player in Europe.
Underpinning deal activity in the sector is the players' plans
to tap growing demand across new geographies for "cloud"
technology, whereby the data and processing for devices like
smartphones is carried out on millions of remote servers.
Equinix said the approximate 1,145 pence per share deal
represented a 27.3 percent premium to the Telecity's closing
price on May 6, before talks were announced, and that Telecity
shareholders would receive 572.5p per share plus 0.0327 new
Equinix shares.
Shares in Telecity, which have jumped 21 percent since Equinix
announced its interest, traded down 0.2 percent to 1,087p at
0711 GMT.
Following completion of the deal, expected in the first half of
2016, Telecity Group shareholders will hold 10.1 percent of the
combined company and Telecity Executive Chairman John Hughes
will join the board of Equinix.
Hughes called the offer from Equinix, a company based in Redwood
City, California which has a market capitalization of $15
billion, compelling.
New York-listed Interxion's shares were due to start trading
later on Friday.
Telecity had said in February Interxion shareholders would
receive 2.3386 new Telecity shares for each Interxion share,
valuing the offer at $2.2 billion when it was announced.
(Reporting by Sarah Young and Neil Maidment; Editing by Jane
Merriman and David Holmes)
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